How the coronavirus outbreak is affecting Horry County’s impact fee rollout
Impact fees are probably coming to Horry County, but the coronavirus pandemic has derailed moving forward with plans due to the economic uncertainty facing the region.
In November 2018, Horry County residents overwhelmingly voted in favor of a non-binding referendum supporting implementing some sort of fee that would charge new construction for its impact on public services or roads. Soon after, the county began a required study to see how high an impact fee’s cost could be set.
While creating an impact fee has been years in the making, the economic downturn caused by the coronavirus led council at its Friday virtual budget retreat to tentatively agree to spend more time reviewing the impact fee proposal. Council approved the first reading of the impact fee proposal, but the required second and third readings might not come for months.
The impact fee proposal was sent to a special workshop that Horry County Council Member Johnny Gardner said will be held later in the summer once quarantining efforts are complete. After that meeting the ordinance will be voted on.
If the economy starts to turn around, you could see the impact fee implemented at the start of 2021, but that time frame is not set in stone.
“We don’t know what the economy will look like in six weeks or six months,” Council Member Danny Hardee said.
At its highest, a single-family home could see an impact fee near $4,838 plus a stormwater fee depending on the region the house is built. The fee could bring in $27 million maximum in revenue each year based on projections made before the coronavirus outbreak.
Originally, Horry County Council hoped to start collecting the fee once an ordinance could pass three readings. The money collected would pay for capital projects like stormwater infrastructure, parks, fire stations and other improvements.
Council members generally felt they needed more information about the economy and more time to fine tune the fee before implementing.
“They say the devil’s in the details and there a lot of details,” Council Member Gary Loftus said.
Delaying collection of the fee until next year means the county will lose out on any impact revenue from summer or fall construction. And if the housing and construction market is slow to recover and not many new projects are built, the potential revenue and benefit of a fee will also significantly decrease.
Construction is considered an essential business in South Carolina despite quarantining restrictions. The National Home Builders Association said a majority of its members are already experiencing declines in work, inspections and even difficulties getting loans.
Right now it is not entirely clear how the coronavirus pandemic will affect the local economy.
“Given what’s going on in the world, we don’t know the impacts of the coronavirus on the real estate market,” Council Member Dennis DiSabato said.
Council Member Paul Prince, who was the only member who said he is against impact fees, said the fee will harm people on fixed incomes or people who already live here looking to build a new house. And with an economic downturn going on, it’s already hard for younger people to afford a new home.
He added people ultimately want better public services and roads in the county, and he personally is willing to pay more in taxes to help improve the area.
“What does it say to someone who worked hard to buy a house and then you tell them about impact fees,” Prince said. “That’s no way to treat our new neighbors in Horry County. … They’re already going to pay taxes till they die.”
How we got here
Horry County is already far in the process of developing an impact fee, including conducting a study on how the fee might look and what it can be used for.
TischlerBise was selected as the consulting firm to complete the study in 2019. It looked at the strain new development creates on public services and determined the maximum cost of an impact fee. A survey on affordable housing was also conducted.
Once implemented, the revenue from the fee can only be used to cover capital improvement costs that benefit the area the fee was collected and cannot be used on recurring expenses. The fee was originally divided up into different public services like fire, police, transportation, the construction of an emergency operation center, solid waste and parks.
Horry County Council added a stormwater component to the fee during its first budget workshop at the end of last year.
The fee’s total cost varies by different types of construction depending on the strain it creates on the different types of public services. The stormwater fee also looks at five different watersheds and changes the fee by the needs within that watershed.
At a low, the Carolina Coastal-Sampit watershed, in rural southern Horry County, is $128. At a maximum, the Coastal Carolina watershed, a popular area for development closer to the ocean, is a fee of $1,807.
Planning Director David Schwerd said the fee incentivizes redevelopment of existing properties, like the work going on at Myrtle Beach Mall. If a property has 600,000 square feet built already, you only have to pay an impact fee on any additional square footage added.
Most council members voiced support for a fee but wanted to study the issue further.
Council Member Al Allen supports the fee but wants to be careful that it doesn’t drive away jobs from the community.
“We’re taking an awfully big step. I am for an impact fee, but we have to make it work for people and the business community,” Allen said.
This story was originally published April 17, 2020 at 2:04 PM.
